(Radio Australia News) The poorest people in Burma are paying more than half their income in hidden taxes, says a human rights report.

The Network for Human Rights Documentation-Burma says interests associated with the ruling military junta spend more than 50 per cent of the national budget on the military and less than 1.3 per cent on health and education.

The report says Burma's tax system lacks transparency and accountability, with payments often arbitrary and made to local military and officials in cash or by forced labour.

The report is based on interviews with more than 340 people across Burma.

Checkpoints

Burmese are charged arbitrary fees at checkpoints, as well as having to make forced donations for festivals, school buildings, school registration and equipment.

Cheery Zahau, of the Human Rights Education Institute of Burma, said the unofficial taxes add to citizen's problems with basic survival.

She told Radio Australia's Connect Asia program: "They can't send their children to school, cannot save money, they don't have enough money for hospitals for health care."

Dr Alison Vicary, an economist at Macquarie University's Burma Economic Watch, said it appeared much of the taxation collected at the local level is going towards the incomes of the local officials, rather to the central government.

"The official data on taxation from the central government budget . . . suggests it is increasing but it is a very, very low percentage of GDP."

She said: "The increase in taxation, I would argue, is partly responsible for the deterioration in the economy particularly in the rural areas."

Incentive

The academic said soldiers in regional areas "have limited business opportunities" and "that would provide them with an incentive to, I guess, appropriate resources from local people."

Dr Vicary says that in Burma's "militarised state" economy, major resources are controlled by the armed forces, with senior officials overseeing control or influence of the private sector.

This legacy of mismanagement has left millions in poverty, and requiring years before recovery, she said.

"This is the problem - is one of the biggest damages that this government has done - in that it's impoverished people for several generations and for several generations into the future . . .

"Burma's now so poor that it's going to take a long time to right the economic problems that the regime has caused."